Only 20 Stocks Are Holding Up the Market (3 Buy the Dip Stocks Outside of AI)

The market may be near all-time highs, but only a handful of stocks have got it there. There are plenty [music] of other stocks actually in a bear market right now. Joining us today is Whitney Tilson with Stansberry Research going over three stocks that are down a little bit right now, and they're in every area of the market. We're going to be talking about small caps to mid-caps to large cap where we're seeing a little bit of a pullback. So, Whitney, let's start there. What are you seeing in the market right now? >> Well, normally, if you told me the market was within 2% of its all-time high and the S&P 500's trading at 41 times inflation-adjusted trailing 10-year earnings, the so-called Shiller PE multiple, which is in the 99th percentile of its valuation all time, a value guy like me would be finding nothing to look at, much less buy. But in fact, um I'm finding a rich target list, and the reason for that is is we have a very bifurcated market. 19 of the top 20 stocks driving the S&P 500 this year all AI tech-related, you know, the Nvidias, the Samsungs, the Microns of the world. And that's accounted for the entire 13% return of the S&P 500 this year. And the other 480 stocks are collectively flat. And here's an interesting statistic for you. 59% of the stocks today in the S&P 500 are trading at 20% or more below their all-time highs, and 17% one out of six are trading at 50% or more below their all-time highs. And so, I'm finding a target-rich environment of beaten-down stocks. >> Yeah, this is so interesting. Like you said, you're a value person. We hear from lots of viewers who like to buy the dip, and they say, "Well, what dip? Right now the market is so high." But I think it's important if you look at the entirety of the market, there are places where you can find those deals. Talk about the the theory behind value investing the way that you describe it. What you are looking for? Why do you look for stocks like that? >> Sure. Well, I'm a old old-school Buffett-Munger investor, meaning I try and figure out what is the intrinsic value of a company? What would a private person, if you're just buying the whole company, what's it worth? What's the intrinsic value? And then you want to buy at a big discount to that, a big margin of safety, the proverbial $0.50. So, that's what Warren Buffett has done his entire career and why he's the most successful investor of all time. So, that's my investment philosophy, but for it to work, there have to be at least a few bargains out there, at least a few cases. You don't need a lot where the market makes a big mistake and sells something off. So, as an example, just a few months ago during the so-called SaaS-pocalypse, some of the greatest businesses of all time, these software-as-a-service companies that just mint money, have no cap backs, high margins, a subscription-based businesses. So, you know, my team and I at Stansberry Research, for Stansberry's Investment Advisory, we were there with a stock like ServiceNow, which, you know, got destroyed. And we said, "You know what? People big corporations using this software aren't going to rip it out to have some kid program some agentic AI, you know, some agent that's going to replace ServiceNow." Sure enough, the stock's, you know, up 50% in a pretty short period of time. >> Yeah, we were absolutely seeing that in most of that software sector. And there's so many other sectors where we've seen the market pull back for really seemingly no reason at all when you look at the fundamentals. And I think that's a time for value investors like yourself to really get in and see some pretty quick profits. So, I think that's a great recommendation. The stocks we're going to talk about today, I know we have one that actually has a more than 50% pullback. So, I'm excited to get into the list. I know you also talk a lot about commodities and looking for value investing in the same way on commodities. And if you want to be the first to learn about Whitney's recommendations in commodities, make sure to sign up for his newsletter, The Commodity Supercycle. This is getting the early investment advice on what to do in commodities and where to find value in that part of the market, too. This is one area where you investors continue to see a ton of growth this year. So, you can scan the QR code or click the link in the description and get a very special offer to join his monthly newsletter right now. And again, get those stock recommendations before the rest of the market finds out. And that is what Whitney and his team at Stansberry Research are really all about. It's giving those recommendations to those investors as soon as they can. >> Uh let me give you two examples. Three years ago, we saw the demand for copper rising. Pounded the table on that with a number of stocks that would benefit. Copper's tripled. A couple years ago, we saw the rise of nuclear energy and uh the demand for uranium. Uh those that sector's doubled. So, that's what we're trying to do with commodity supercycles is identify emerging trends, whether it's natural gas, oil, copper, gold, um etc. And uh we've got a good track record. >> Well, this next three stocks we're going to talk about, I'm curious to see the track record on this one in the future because right now some of these are down a little bit. We have one speculative play to talk about, a mid-cap, and a large-cap. So, let's start with that speculative stock that you are recommending right now. >> Joby Aviation, J O B Y is the ticker. Uh and they make an electric aircraft that's a hybrid helicopter. It takes off like this, then the motors rotate forward and it flies. It's whisper quiet. So, it's sort of like a helicopter, um but whisper quiet, which is a big important advantage, whether it's for military uses or um you know, most helicopters aren't allowed to fly in cities or out to Long Island or something because they're so loud. Uh but this one's, you know, 99% quieter. It's a speculation. It's my favorite speculation. I've emphasized anytime I talk about it, size it appropriately because it doesn't have revenue yet. They don't have FAA approval, so they're not flying commercially. But I think they're the leader in an exciting sector that has all sorts of interesting um applications. Uh I recommended the stock here at this conference three years ago at seven bucks. It tripled and now it's back to seven bucks. My thesis on it is partly I think they're going to be the first to market and exciting new cutting-edge area. And the fundamentals justify uh a much higher price, although it's hard to estimate what it's really worth, given they don't even have revenue yet, much less profit. But also, they have cutting-edge technology in both electric motors and batteries, which have applications that, for example, Tesla might be interested in and electric vehicle makers. So, I always figured, well, if it doesn't work out as a aviation business, somebody will buy them just for their technology and their engineers, which who are among the best in the world. And lastly, I figured, once they start flying commercially, retail investors could go crazy for this kind of stock. And that was set to happen this spring between Abu Dhabi and Dubai. They don't yet have approval to fly commercially in the US. That's a higher bar. But out in the United Arab Emirates, they were happy to have a technologically leading company come fly there. Well, lo and behold, the Iran war derailed that. So, that sort of delayed, you know, when they're going to start flying commercially, which I think is a big catalyst for the stock. But now, the stock is back down to a mere $6 billion market cap. It's retraced all of its gains. And so now, it's back to being a super interesting speculation. They've got plenty of cash. They're not going to run out of money. And I think I think, you know, the upside there's there's sort of unlimited upside, and I think pretty limited downside here. >> Yeah, this is such an interesting name because the the stock story over the last year or two has been incredible. Like you said, it had huge gains. It had so many retail investors very excited about not only Joby, but really the whole eVTOL space. >> Right. And let me actually mention that anytime you're looking the whole space sort of caught a a wave when investors started to get interested in the space. But where is all the speculative money in the world gone? Over to AI. So, AI has just sucked money out of other more speculative areas, which would include eVTOLs, but also, you know, biotech and merging companies there. Medical device companies. My cousin has a venture-backed private company, small company, 100 plus employees, doing absolute cutting-edge, um, um, medical devices. And he's struggling to raise money from venture capitalists right now because all the money's going into AI. Well, the same thing's happening in the public market. So, again, as a value investor, sort of a contrarian, I'm looking in the areas where everybody else is fleeing because that's where where you want to buy the market-leading company with great technology that's not going to run out of money anytime soon. That's where you can find, you know, multi-bagger returns, you know, albeit speculative. >> Yeah, speculative is is the key word with Joby for sure. I love that you describe that even if this, you know, aviation story doesn't work out for Joby, there are other valuable parts of the company. I think that's a great point for investors to keep in mind with Joby in particular. And the delays are a huge part, not just for Joby, but for the whole sector as well. >> Yeah. >> Is that timeline going to be critical? I think like you said, it's going to be a huge catalyst whenever, uh, the first commercial flights actually do take off. But how much longer could that delay continue? >> Well, if you tell me when the Iran war ends, >> [laughter] >> and it it's safe to introduce, you know, flights, right? It's not like international flights coming in. This is a 30-minute hop between the Abu Dhabi and Dubai, which is perfect it's just absolutely perfect for this kind of aircraft. And so, that's the uncertainty, and investors hate uncertainty. So, they just sort of they don't see a near-term catalyst, they dump the stock. >> Yeah, is it possible because of that conflict happening in the Middle East that maybe the US could get commercialization first? And where are we at in that US commercialization? >> It's hard to know. The FAA is a We should all be grateful is a very, uh, rigorous regulator. Joby is further along than any of its competitors for sure, but again, that's at least a year, probably 2 years out realistically. So, again, without any immediate catalyst, but, you know, the war ends, they start flying, uh, between Abu Dhabi and Dubai, and I'm going to be on the first flight over there to actually be there. I want to fly it myself. I think you know, not fly fly it as a pilot, but take a ride myself as one of the first passengers. You know, you can imagine CNBC covering it, and it is the coolest technology what what this aircraft is able to do. Their first customers, by the way, the first aircraft delivered were to the US Air Force cuz think about the military applications uh when these big loud helicopters are bringing Navy SEALs in to, you know, the two of the worst accidents that killed the greatest number of SEALs of all time were in Afghanistan, where the Taliban could hear the helicopters coming 10 mi away and shot them down with a rocket-propelled grenade. Well, they won't be able to hear a Joby aircraft coming in, right? Or extracting coming in quietly to extract a wounded soldier near the front. Um that um that stealth um that's made of carbon fiber, um and it's whisper quiet that you can see the military applications for this as well. So, you know, if this if this if if the air taxi service doesn't prove out to be a a good business, somebody will buy this company, and there will be the mother of all bidding wars, in my opinion, cuz any electric vehicle maker's going to want the battery and electric motor technology, any um military contractor, the Boeings, the Lockheed Martins, Northrop Grummans of the world are going to want that. So, that's it reminds me when I when I was pitching Netflix right at the bottom back in 2012. It had a $3 billion market cap, and I said I said, "Look, it either they're going to this streaming business, which was still a nascent business, either streaming business is going to work or somebody will buy Netflix at $100 per paying subscriber." Um and in a world where paying subscribers for other companies were at $2,000 a sub, and Netflix was at $100 a sub. So, that ended up working out pretty well, a 100 bagger in 8 years. >> This is a great place to start on the speculative stock that is down so much right now. The The stock on the list, we're going to move on to mid-caps. This one is way less speculative. This is a really solid company. >> Yeah, this is the opposite. This is just a it's called Casey's General Stores. CASY is the ticker. They are have 3,000 gas station / convenience stores in 19 states all in the Midwest and base headquartered out of Des Moines and they are steady growth story. They have 18 billion in revenue. Stock trades has a market cap of 22 billion dollars. So it's a sort of off the radar mid-cap company and they are the third largest convenience store chain in the US and this will surprise you. The fifth largest seller of pizza in the United States. >> does not surprise me. I'm from the Dakotas. This is one of my favorite my kids' favorite pizzas, too. >> Sure. Sure. And so that actually captures an important piece of the business, which is you might think man gas station convenience store, that's every gas station, right? But Casey's has a disproportion amount of their business in the what they call the interior business as opposed to just selling gas, which is a low margin business. And they've got great pizza and other food hot food. And so it's they've got higher margins. They have an app that more than 50% of their sales are through their app. So they're sort of technologically advanced. So they've sort of built a better mouse trap and I see an almost unlimited growth runway. The problem is that the stock was quite well known to Wall Street and traded a very high multiple. Was trading at 35 times forward earnings until just a couple months ago and the stock so I was waiting for a pullback to get a decent entry to a stock that I think I could hold for 10 years. And lo and behold the last two months stock's down 34% and now trades at 26 times forward earnings, which is still a sort of a premium multiple for for a company with this long a growth trajectory ahead of it. I think it's worth sort of paying up. >> such an interesting company. We've talked about it on the channel before. Again, several different analysts are bullish on this one for all the reasons you just said. There's so many factors about this company where it's growing really strong. Anything about the reason it pulled back that has you concerned? Uh, was it in reaction to an earnings report? I I can't remember about when it started to pull back. >> Yes, because always if you see a stock lose a third of its value in short period of time, you got to wonder, "Uh-oh, is the thesis broken? Is Did they make a terrible acquisition or did something terrible happen to the company?" In this case, not at all. Doesn't change the long-term growth trajectory at all. The stock has sort of drifted down, you know, 10 or 15% after the war started and diesel prices, gas prices went up, which um, actually helped their gas revenue, but um, their customer had less having paid 20, 30% more for to fill up their car, didn't have as much money to go spend in the store, which is the higher margin good business, right? So, there were sort of investor concerns about that and lo and behold, they reported third quarter earnings, stock drop stock dropped 14% that day because the inside business, the the gasoline business was strong, but uh, that was mostly just due to rising diesel prices and fuel prices. The inside business, strip that out, was a little on the weak side and they didn't raise guidance. Now, you'd think, "Okay, so they met they they reaffirmed guidance, which normally for most companies is fine, but not when you're trading at 35 times forward earnings." When you have a premium multiple, investors are expecting you to raise guidance and Casey's didn't because they've got some sort of macro headwinds, but nothing at all has changed about their competitive positioning quality and management long-term growth runway. It's just, you know, some short-term stuff that investors are, you know, probably got a little too excited about the stock bidding it up to 35 times earnings. Now, it's back 26 times earnings, a good entry point. >> Yeah, as a value investor, this is enough of a pullback for you to start adding this to your portfolio. >> Yeah. >> Here's and here's the most interesting and uh, little bit of historical research I did. This company reminds me a little bit of Walmart, different business, but sort of Midwestern, salt of the earth, you know, non-promotional, high-quality management, and just replicating a concept that is just works, right? Well, when did Walmart have $18.6 billion in trailing sales, which is what Casey's has today? And I went back and I researched it, and lo and behold, it was the middle of 1988. 36 years ago, Walmart had the same revenues as Casey's. So, then I said, "Okay, what's the profitability back then versus Casey's today?" Identical. What's the PE multiple? Forward PE multiple Walmart versus Casey's today? Identical. Imagine back then in mid-1988, you're looking at this, you know, who's this guy Sam Walton and this sort of obscure concept that's only out there in Arkansas and in the Midwest, right? Nobody's really And And boy, that stock price seems, you know, 26 times earnings forward earnings, that's a high price. Walmart since then has been almost a 100 bagger. Had you held your nose and paid up for Walmart back in mid of middle of 1988, and that's not even counting the dividends you're getting along the way. So, I don't think Casey's going to be a 100 bagger over the next 36 years. I'd be surprised if that were the case. But, but it shows that, you know, when you're looking at a long-term compounder like this, you should pay much more attention on do you really think they can grow earnings at a double-digit rate for the next 10 years? If the answer to that question is yes, then 26 times earnings is a bargain. >> That is such an interesting comparison. I love that you went back and did the research and looked at that comparison to Walmart. I think one thing that Walmart has always done well is expand, right? They continue to add stores. And being from the Midwest, you can see Casey's is very much on the expansion train. They are adding lots and lots of locations. >> And here's the thing to understand. Casey's targets a niche of small towns, 500 to 20,000 population, and so they're not out there competing with Walmart or Bucky's or the mega players. For perspective, they're in Texas right now. They have 3,000 stores in 19 states. Just in Texas, there there are small towns that are perfect for Casey's. There are 2,000 of them. So, just in Texas, Casey's could almost double its current size. >> Absolutely. That expansion rate is huge for Casey's. I think this is a really interesting stock pick. And I love that you brought it to our attention when it's at this dip right now. It's a good value for investors to be looking at. A great second pick stock to look at for this video today. Again, the kind of research that Whitney and his team do at Stansberry Research is intense. They look back at the market. They look historically at the market. They bring decades of experience in investing, and that is what they look at in commodity super cycles as well. It's It's looking at a different area of the market than what we're talking about in this video, but there is so much growth to be had in those areas as well. So, again, a reminder to subscribe to Commodity Super Cycles here today. It's a very special offer to join the program, and you'll get those monthly stock picks from Whitney and the team at Stansberry. So, scan the QR code or click the link in the description, and you can get the advantage of all of the research that they do, and give you those stock recommendations right from them before the rest of the market finds out. All right, Whitney, we have one other stock to talk about. And this one is that large-cap stock, so you're definitely going to have heard of this company before, but I know you have a really unique argument for why this is a good value today. >> Sure. Uh the stock is Eli Lilly, the the largest pharmaceutical company in the world. It's got a trillion-dollar market cap, trades at almost 40 times trailing earnings. So, you're you know, a lot of people I think will look at it and think, you know, I've missed it. I still think we're in the if not early innings, certainly no more than middle innings of this story here. Eli's Lilly's growth has been driven by um the fact that it has the best GLP-1 drug out there, the weight loss drug that 12% of Americans have taken or are currently taking. Um it's uh called tirzepatide. It's sold under the brand names Mounjaro or Zepbound. So, most people probably heard of it. It's sort of the next generation drug from Ozempic, which sort of launched the category. That was a Novo Nordisk drug. Then along came Lilly's better drug, greater weight loss, fewer side effects. So, um and they charge a premium price for it, but for anyone who can afford it, you want to be on Zepbound, not Ozempic/Wegovy. That's That's the older drug. So, the market though is a well aware of this. So, what are the two reasons why I What Why I think the market, as much as it loves Eli Lilly, is under appreciating uh how much growth there's going to be. Reason number one is they have a um a new drug called retatrutide um in phase three trials, where on Zepbound the average person is losing 20% of their body weight. On retatrutide it's 29%. It's almost 50% more weight loss and with less muscle loss, which is one of the, you know, when people lose a lot of weight on Ozempic or Zepbound, um they're losing fat, but they're also losing muscle. So, number one is I think retatrutide will be approved next year and will um dominate the sector. Everybody will want this, you know, more powerful drug. Leads to greater weight loss and less muscle loss, right? Reason number two is everyone is assuming the GLP-1 drugs, everyone thinks of them for people Initially it was approved for people with diabetes and then for weight loss. I'm now convinced every human being on the planet will want to be on these drugs, even if they don't need to lose weight and don't have have diabetes, because every week there's a new study coming out showing other health benefits. Fatty liver disease goes away, sleep apnea goes away. It has anti-inflammatory properties. So, joint muscle pain, arthritis, um um uh lowering cholesterol, blood sugar. A critical element is addictive properties. So, as the evidence piles up, I'm convinced that um people who want to lose weight are going to all be on these drugs for the benefits of weight loss. Um Um, and but now I'm convinced skinny healthy people like myself um, and I'll share a little hint share a little bit of information. I haven't talked about this the starting in February I started microdosing a GLP-1 drug partly because I'm risk-tolerant and and um, I'm comfortable with being a guinea pig. I'm having had a personal experience with it now. And by the way, I didn't really need to lose weight uh, but I lost 12 lb and I'm running the New York City Marathon in a few weeks on my 60th birthday on November 1st and let me tell you not carrying around a 12 lb weight belt around my waist, which is what went away uh, will make a huge difference. >> Yeah, a really compelling argument for why GLP-1s are going to boost Eli Lilly. Let's talk about the stock a little bit now too. So it is pulled back slightly from the highs that it was at, but this one compared to the other two is still doing fairly well. This is a a very small pullback. Talk about those PE multiples and where you think that this could be going as far as how much growth investors could get looking at Eli Lilly today. >> Yeah, well the key the key about Lilly Lilly is not at in any way an out of favor stock. When you find a company um, with just this kind of dominant position, you know, something like Google 10 years ago or something like that and where earnings are growing. I mean think of what Nvidia had a billion trillion dollar market cap. And then it went to five trillion, right? So Lilly's earnings are exploding uh, up like 70% year-over-year like Nvidia kind of numbers. And so my bet here um, well so on a trailing earnings it's trailing trading at almost 40 times earnings. On a forward earnings and I think the company's going to crush earnings estimates, it's trading about 28 times, which is actually lower than it's been for most of the past few years. I think 28 times earnings for a company with this dominant a position currently earnings exploding based on current use and its current drug. Then you have a monster new drug coming out in the next 12 months is my guess. And I think adoption outside of just overweight people to all human beings on the planet. That's now the TAM, the total addressable market. Now, obviously, you know, the pricing is isn't going to allow, you know, the billion poorest people in the world on this. But um I'm convinced, based on my own experience and dozens and dozens of my friends now, that we are the early adopters and that as more and more of research comes out, but as more and more people hear the almost miraculous stories of the experiences people are having on these drugs, I think everybody's going to want them. And most people, if they don't need to lose weight, they'll just take small doses. Like I'm just taking a tiny little 1 mg dose. But like 10% of the full dose, cuz I'm not trying to lose weight at this point. >> So interesting. I also love that we had a conversation on three stocks that have nothing to do with AI. Refreshing Refreshing to get out of the topic that everyone is talking about this week. So, thank you so much for the stock recommendations and looking at where to find value in the market right now. I think it's super valuable for investors. If you want to look at some other stocks outside of that AI space, we recently did a video talking about three biotech stocks you can buy. You can watch that full interview here and get some more outside of AI stocks added to your portfolio. Watch the interview here.